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Ocado in drive to add electric vehicles to delivery fleet

Online grocer Ocado has been operating two electric vehicles in its fleet of circa 1,500 online delivery vans since 2010, but advances in technology, changes in regulation and a continued desire to improve eco credentials means that number is set to grow.

The supermarket group has acquired 15 Fiat chassis from BD Auto, a Turkish company that entered the UK market in 2017 which converts vans into electric-powered vehicles. Five are expected to be in operation within the Ocado fleet in January 2019, while the other ten will be developed and then added over the course of next year.

Mark Bentley, director of service delivery at Ocado, says if the move is successful more electric vehicles will be purchased and then rolled out to the grocer’s delivery network, but he acknowledges it is something of a “leap of faith” because the project isn’t supported by mainstream van manufacturers. The environmentally-friendliness of its operations is something Ocado takes seriously, he adds.

Heavy traffic

If Ocado was running electricity-powered vans in 2010, and the UK’s largest retailer, Tesco, was involved in a e-vehicle partnership with Modec in 2007, before that manufacturer fell into administration, why has such limited progress been made by retailers in this space?

According to Bentley, it is a combination of lack of commercial van manufacturer investment, the impact of the financial crash turning companies’ attention away from the environment, and issues around cost, range and regulation of technology.

“With electric vehicles and delivering chilled product you need something to power the fridge,” he notes.

“The diesel vans take power from the engine but if you don’t have that it must come from the battery, and if you do that, it diminishes the range. We had to confront those issues.”

“Electric vehicles in the industry have not taken off until now because the more weight you put on the van on the chassis, the less you can carry in goods because of the 3.5-tonne limit"

Until a recent government dispensation, one key challenge for retailers looking to use electric vehicles has been the industry relies on operating vans with a maximum load capability of 3.5 tonnes, including the overall vehicle weight. Anyone with a driving licence can drive this type of vehicle and there are less restrictive rules around monitoring driving hours on the road than with large goods vehicles.

Bentley adds: “With electric vans there is a substantial amount of weight gain because the batteries are big and heavy.

“Electric vehicles in the industry have not taken off until now because the more weight you put on the van on the chassis, the less you can carry in goods because of the 3.5-tonne limit.”

Ocado’s experiments with electric vans to date include its continuing use of the two Isuzu chassis which were converted into electric-powered machines by its existing delivery van box builder, Paneltex. The grocer went through the process of training drivers so they could use a different class of licence, but only operates these vehicles from one satellite site where vehicles are required to take deliveries out and return to site twice in a day.

“We needed to be able to do that otherwise it would have been an expensive dinosaur we wouldn’t be able to use,” says Bentley.

“We operated two and we had to get over the drivers’ confidence issues about getting stuck on the road with no power. There was lots of anxiety about it, so we struggled with getting drivers on board, and we also struggled getting enough power to the site.”

Help!

Last year, Ocado worked with Danish urban vehicle company TRIPL to run further electric trials in London, but even though these offered benefits, such as enabling drivers to get down narrow streets, concerns around load capacity and range persisted.

TRIPL allowed Ocado to carry two or three orders at once in a small grocery box, but Ocado’s vans take 20-21 deliveries at time on average – so the productivity and efficiency difference was clear.

In recent months, the UK government, like other European administrations, has offered special dispensation to companies which means standard-licenced drivers can operate vans over the 3.5-tonne weight limit if the vehicles have green credentials.

And with London setting a target to become a zero-carbon city by 2050, and the city’s mayor Sadiq Khan establishing air quality improvement goals such as the creation of an ultra-low emission zone in central London from 8 April 2019, moves are clearly being made to encourage adoption of electric transport.

“The useful thing about the mayor doing that is it forces manufacturers and operators to make some awkward decisions,” says Bentley.

“Sometimes you don’t want to go first. These vehicles are more expensive and no-one else is doing it, so, in some ways, moves like this do help. But there must be a consideration that we need enough electricity to do it, and we need to put the appropriate infrastructure in, as well as get the drivers who can actually drive the vans.”

Together in electric dreams

In July this year, Mercedes-Benz announced Amazon Logistics had invested in 100 of its eVito electric-powered transit vans, and will situate them at its Bochum and Dusseldorf locations in Germany by the end of 2018.

It’s a further sign that the biggest deliverers of online goods are strengthening their fleets with greener vehicles and identifying a stronger business case for using them.

Bentley says if more companies are to motor their fleets using electricity, it might require the development of batteries that store energy throughout the day and take from the grid at non-peak times. Once again, it is an infrastructure issue, he notes.

The move to allow greener vehicles over 3.5 tonnes to be driven using a normal licence – as well as a greater number of manufacturers now launching electric and hybrid models – may well get more retailers investing, he adds. Icelandic online marketplace Aha currently operates an electric-only delivery fleet, charging its vehicles overnight at its new headquarters in Reykjavik and showing the art of the possible for the industry.

Identified benefits of using electric vehicles include lower maintenance costs, while using electricity over the long run will be cheaper than buying diesel. But at present the way retailers are developing the vehicles in conjunction with manufacturers is more expensive “at over double the cost of the completed diesel van”, notes Bentley.

The market is changing all the time, though, and it appears some important developments are occurring at government, manufacturer and retail level to pave the way for greener fleets.

Bentley says: “Battery technology is developing fast – they are getting smaller in size and weight, and the range is becoming better.

“Do I think in the future we’ll have tiny batteries and huge range? Yes, I do, but we’re not there yet.”

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